Title: USD/JPY Facing Downward Pressure: Detailed Analysis
Source: Originally reported by Economies.com on September 1, 2025
Author: Economies.com Analysts
The USD/JPY currency pair has recently come under renewed selling pressure, breaking through critical short-term support levels and signaling potential for a deeper corrective decline. As forex traders begin a new month, attention is keenly focused on Japanese yen strength driven by a mix of technical indicators and trader sentiment. The original analysis by Economies.com provides a thorough examination of intraday price patterns and their implications for upcoming moves. This report expands on that analysis with an in-depth discussion of key technical factors influencing the pair.
Overview of Current Market Sentiment
The USD/JPY pair continues to trade within a relatively defined downward channel, signaling a bearish bias in the short term. After reaching a peak earlier in the month, the pair failed to maintain bullish momentum and began retreating amid broader U.S. dollar weakness and an uptick in demand for safer assets, particularly the Japanese yen.
Key Drivers of USD/JPY Price Action:
– Softening U.S. dollar due to mixed economic indicators, particularly weaker consumer spending and slower inflation readings.
– Strength in the Japanese yen, driven by demand for safe-haven assets amid global uncertainty.
– Technical rejection near recent highs leading to a retreat toward a key support region.
– Bearish momentum reinforced by moving average dynamics and oscillator signals.
Technical Breakdown: Key Levels and Indicators
The pair has breached the support level near 146.55, a key short-term zone that has held multiple tests over the past several trading sessions. This downside breakout confirms the prevailing bearish tone and opens up space for additional declines over the next few trading days.
Support and Resistance Levels:
– Immediate support: 145.00
– Additional support zones: 144.45 and 143.60
– Initial resistance: 146.55 (now turned into short-term resistance)
– Strong upward barrier: 147.80
The breach below 146.55 has shifted the short-term bias from neutral/bullish to clearly bearish, with technical analysis pointing toward further downward movement unless prices can regain ground back above the resistance zone.
Indicators and Oscillator Readings:
– Simple Moving Averages (SMA):
– 50-period SMA: Currently trending downward, suggesting short-term negative momentum.
– 100-period SMA: Still bullish but flattening, indicating a possible longer-term consolidation ahead.
– Relative Strength Index (RSI):
– Current RSI reading: Approximately 45, indicating that the pair is neither oversold nor overbought but trending lower.
– RSI divergence is absent, meaning current movement has momentum support.
– MACD (Moving Average Convergence Divergence):
– MACD lines cross below the signal line, reinforcing bearish alignment.
– Histogram momentum also favors downward moves.
Bearish Reversal Patterns Take Shape
From a charting perspective, candlestick patterns reflect a bearish reversal at key highs near 147.85 last week. A shooting star formation followed by successive bearish candles confirms the breakdown in upward momentum. This pattern typically precedes continued decline as sellers gain control.
In conjunction with bearish candlesticks, the pair also formed a double top pattern in the vicinity of 147.80, further reinforcing the likelihood of downside progression. When price patterns and indicators align, the probability of technical follow-through increases, as is being seen currently in USD/JPY action.
Forecast and Short-Term Projection
Assuming price remains below the key resistance at 146.55, downside targets for the near term include:
– First bearish objective: 145.00
This level serves as a psychological round number as well as technical support derived from previous mid-term consolidation zones.
– Second target: 144.45
Coinciding roughly with the 50-day SMA, this area may offer partial support depending on surrounding macro conditions.
– Third target: 143
Explore this further here: USD/JPY trading.